German Recovery to Continue
World Economy

German Recovery to Continue

Germany’s economic recovery will continue in 2016, driven by relatively strong domestic demand, says Moody’s Investors Service in a new report, Commodity Online reported. “We expect a slight acceleration of Germany’s real GDP growth to 1.8% in 2016, benefiting from robust domestic demand supported by a solid labor market and the further drop in oil prices,” says Thorsten Nestmann, a Senior Credit Officer at Moody’s. “Downside risks mainly stem from a less favorable external environment, in case of a more protracted slowdown in China and other emerging markets.” In the long term, Germany’s ageing population and declining workforce could weigh on the economy and put pressure on the sustainability of social security systems. Moody’s notes that the refugee crisis is unlikely to have material near-term fiscal implications for Germany. The fiscal costs related to providing food and shelter and to supporting integration with language courses and other measures are manageable at below 0.5% of GDP.


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